Can Crawl Space Ninja require a franchisee to purchase insurance from a designated supplier?
Crawl_Space_Ninja Franchise · 2024 FDDAnswer from 2024 FDD Document
Within thirty (30) days of any such required new limits or types of coverage, Franchisee must submit proof to Franchisor of Franchisee's coverage pursuant to Franchisor's requirements.
- 15.5.
Additional Insured.
All required insurance policies shall name Franchisor and their affiliates and their members, officers, agents and employees as additional insureds as their interests may appear.
All public liability policies shall contain a provision that the additional insureds, although named as insureds, shall nevertheless be entitled to recover under such policies on any loss caused by Franchisee or Franchisee's servants, agents or employees.
All policies must provide for a waiver of subrogation in favor of Franchisor.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
Based on the 2024 Crawl Space Ninja Franchise Disclosure Document, franchisees are required to maintain certain insurance coverages, and they must provide proof of this coverage to the franchisor within 30 days of any required changes to coverage limits or types. Crawl Space Ninja, along with its affiliates, members, officers, agents, and employees, must be named as additional insureds on all required insurance policies. These policies must also include a waiver of subrogation in favor of the franchisor.
The FDD excerpts do not explicitly state whether Crawl Space Ninja can mandate that franchisees purchase insurance from a specific, designated supplier. However, the level of control Crawl Space Ninja exerts over the insurance requirements, such as specifying coverage types, limits, and additional insureds, suggests they may have preferred providers.
A prospective Crawl Space Ninja franchisee should directly ask the franchisor whether there are any designated or preferred insurance suppliers. Understanding the degree of flexibility in choosing insurance providers is crucial for managing operating costs and ensuring compliance with the franchise agreement.